6 Tips for Budgeting on a Year-of-Service Stipend
Whether you’re looking to spend a year abroad or you find yourself, like I did, remaining domestically, the process of discerning a year (or more!) of service is a big step, especially when you’re a recent college graduate with dreams of building a career and maybe even starting a family.
There are many things to consider, and finances are not the least among them. For my term of AmeriCorps service, I was allotted a living stipend. It was respectable, but it still forced me to become creative with everything from housing to meals to how I addressed student loans — all while allowing myself some wiggle room for getting out and having fun. Here are my biggest budgeting takeaways from this experience:
- Explore non-traditional housing options.
- Meal plan, and do your own cooking!
- Two words: Thrift. Stores.
- Establish a “fun” budget, and stick with it.
- Have loans? Don’t ignore them!
- Feeling broke? That doesn’t mean you can’t give back.
Many year-of-service opportunities include housing, but not all do. Mine didn’t. Renting an apartment, even if shared, would have left me strapped financially. I posted a callout on social media for anyone with a room for rent. I ended up connecting with a family who welcomed me into their home for free. In exchange, I did an hour or so of chores each night and babysat their kids once every week or so. I saved money, and it was a blast!
Building a habit of thrifty food shopping and intentional cooking saved me a lot of money. Some of my favorite healthy meals included old fashioned oatmeal for breakfast, boiling a pot of dried beans to use in lunches, and buying sale items in bulk to make into massive meals for the week. Plus, bulk cooking saved time!
Even to this day, nearly my entire wardrobe is made up of thrifted items. Earlier this week, I spent less than $16 on six items of clothing! Plus, if your clothes are thrifted, you don’t have to feel bad about donating them back once you’re ready to get rid of the old and bring in the new. It may take a few trips, and it helps to be generally browsing rather than seeking a specific item. But as long as you don’t mind doing a little digging, you can find the similar clothes that you would find in store, in good condition, and for a fraction of the cost.
There are plenty of ways to have a blast without spending money, but once in a while, it’s nice to treat yourself to dinner with friends or a movie out. But if these are regular activities, they can add up fast! A beach day, walks with friends, or hosting a movie night can sometimes be just as much fun, without costing too much. To avoid being stressed about money when you’re in need of a night out, try to save a little of your budget for fun ahead of time.
It can be easy to think about loan deferment or forbearance as an opportunity to put student loans in a box and shove them on the back shelf to collect dust. Don’t! First, educate yourself on what exactly is happening with your loans. Are they already in deferment? Some, such as subsidized loans, will not accrue interest, but others, such as unsubsidized and Direct PLUS loans, will.
Do your research and know what is happening to your loans. In my experience, AmeriCorps paid the accruing interest on unsubsidized government loans, but that may not be the case for other service opportunities. Educate yourself. And, if your loans are accruing interest, making monthly interest payments could still help you in the end, resulting in a tax break.
In short, know what is happening and explore your options. You don’t want to be racking up more debt during your year of service. And, if you’re able to, you can make principal payments even if your loan is in deferment or forbearance. Even if the payments are small, trust me, you’ll be glad you did!
Especially when one’s income is so small, it can be easy to exhaust funds on ourselves. Don’t forget about the Church and/or charity.
“But I’m already donating my time, and I’m really strapped for funds. Isn’t that enough?”
The point of tithing is not that we give, for example, $5 out of our $300 monthly stipend. The point is that we’re giving back to the One who gave us everything. If you really can’t make a material sacrifice, prayerfully consider how else you can stretch yourself to enter deeper into the sacrificial love that Jesus so perfectly modeled for us.
Because, really, isn’t giving of ourselves what this year of service is about?